Daryl Morey

Sponsored by Greenhaven Road Capital, finding value off the beaten path.

Daryl Morey was on the Woj Pod with Adrian Wojnarowski to talk about building a team and while the episode was short, it was long with good advice. We’ve praised Morey many times.

Morey told Woj that his executive of the year trophy is still in the box. It’s an award he’d written off after Pat Riley didn’t win putting together the Miami team. “I thought, this award is stupid,” Morey said. “It’s a weird combination of moves and a popularity contest.” 

Yet, it was recognition for the Houston Rockets staff. “I like that it’s an organizational award. Our second round picks aren’t magic. We have a great staff.” 

That staff helped Houston almost make the NBA finals. Their secret to success was “not complicated.” Better players win more games. But everyone already knows that.

“From there, we said, ‘How do we create the environment that makes them (players) want to be here?’ The one thing we thought we could differentiate ourselves on (though our edge might be eroding) is to be the place where top players say ‘If I go there, I’m going to have a big voice in how everything happens.’ That makes sense from a recruiting perspective and once they’re here. If you have your top players involved there’s more buy-in.”

This is a new idea in sports. When Pete Carroll was an assistant he was specifically told not to ask the players their opinions. Yet, this is stupid. The person closest to the problem is often the best equipped to solve it.

Morey and his staff will go to Chris Paul and James Harden and say, “Here are the guys that are available, here are the ones we think can help. You’ve played against them and with them, what do you see in them that would move them up a little bit or down a little bit?’”

Tweaking prevents algorithm aversion. It creates buy-in. This, Morey said, “has been an edge for us.” 

In buzzwords; Part of the reason the Houston Rockets have a competitive advantage is thanks to a decentralized command with invested stakeholders.

This works in media at places like Seinfeld, The Simpsons, and Pixar.

This works in business at places like Koch Industries and Oaktree Capital.

This works in the military as well.

The Houston culture, “has been developed over years.” About working with Harden, Morey said, “That relationship is where both of us can give feedback to each other that sometimes isn’t easy. Like, I’m not seeing what you’re seeing, let’s talk about it.”

It takes hard work and good relationships to argue well.

Another part of the reason Houston succeeds is that they find good people; players, staffers, and coachers. Sometimes that means fishing where others aren’t. Morey explained:

“…look at it from a Moneyball type of perspective and ask, ‘What are other teams not seeing?’ Our job isn’t to know what’s going to be good, it’s to know what’s going to be good more than other teams think is good.’ Everyone knows winners are good to have, but we have to find things that other teams aren’t seeing. Maybe someone has been in a  bad situation. Maybe someone has been injured. Maybe someone has been in offensive systems that didn’t accentuate their skill. We have to choose pools that other teams don’t want to play in.” 

Houston has to be different and be right and they try to find individuals in bad situations because conditions matter.

Mike Lombardi wrote: “I couldn’t help but wonder (after Rich Gannon’s MVP award) just how many potentially great quarterbacks have wasted away in the wrong system.” 

And said:

A final part of the reason – on an inconclusive list – is Morey himself. The hardest part of his job is the “travel to obscure gyms,” and time away from his family. But those are the trips he needs to take. He needs to sit on bleachers and watch players.

“I feel like that firsthand knowledge really matters. You learn in any job that as you move up and up the information gets filtered and filtered and you can lose touch with the things that help you differentiate and be successful.”

Executives that don’t feel the winds of the real world lose touch.

Ed Catmull wrote that after the Pixar IPO he noticed that the pettiness and bickering disappeared — in his office. So he left his office, walked around, and asked questions. Going to basketball games over Thanksgiving is Morey’s version of that. This holds for PR and design too.


Thanks for reading.

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